Crypto Bloodbath: Bitcoin Plunges Below $85,000

The cryptocurrency market is reeling from a brutal sell-off, with Bitcoin plunging below the critical $85,000 mark and Ethereum following in a sharp downward spiral. Billions of dollars have evaporated from the global crypto market cap in the last 24 hours, triggering widespread alarm and liquidations.

Bitcoin , the bellwether cryptocurrency, tumbled to $85,131, marking a 4.22% drop in the past 24 hours and a painful 12.31% decline over the past week, per Coinmarketcap data. Ethereum fared even worse, plummeting 6.44% in the last day to $2,330, and a hefty 15.09% over the week.

The overall global crypto market capitalization now stands at $2.79 trillion, a significant 4.63% decrease in just 24 hours and nearly $1 trillion lower than the $3.73 trillion peak reached when Bitcoin soared past $106,000 in December 2024. The pain is being amplified by massive liquidations, with CoinGlass data revealing over $765 million wiped out in the last 24 hours alone, adding to the $1.5 billion lost the day prior on February 25th.

A key driver of this dramatic downturn appears to be a sudden shift in institutional investor sentiment, evidenced by a massive exodus from Bitcoin exchange-traded funds ( ETFs ). SoSoValue data indicates a staggering $937.78 million was withdrawn from Bitcoin ETFs on Tuesday, marking the largest single-day outflow since their inception. This exodus solidifies a clear change in institutional appetite, bringing total outflows for the past week to nearly $1.5 billion, further accelerating the market’s downward momentum.

The market’s woes began to mount following the election of President Donald Trump in January. While initial optimism fueled a rally that saw Bitcoin peak at over $108,000, hopes for a rapid implementation of pro-crypto policies have since waned. Concerns are growing that the Trump administration may be prioritizing aggressive trade policies over fostering a favorable regulatory environment for digital assets. Since the post-election peak, Bitcoin has now fallen approximately 20%, reflecting a significant cooling of investor enthusiasm.

Adding to the negative sentiment, security concerns and a drain on market liquidity are further fueling the sell-off. The recent collapse of the Solana memecoin boom has depleted market liquidity, while the unresolved $1.4 billion Bybit hack has ignited fears over the vulnerability of centralized exchanges. These factors, combined with the broader macroeconomic uncertainty, are creating a perfect storm for a crypto market correction.

While some analysts are attempting to frame the current downturn as a healthy market reset, others are warning of potentially deeper losses. Geoff Kendrick, head of crypto research at UK bank Standard Chartered, cautioned in a Wednesday note that the sell-off is likely not over. “These types of losses rarely end well and I still think the big capitulation is yet to come,” Kendrick wrote, presciently noting the further 7% drop Bitcoin experienced on Wednesday.

He previously flagged $80,000 as a critical level, a break below which could trigger another wave of liquidations and potentially send Bitcoin spiraling towards $70,000.